Each trading strategy has different configuration parameters and levels of complexity. Sparrow is a very easy strategy to use, but with solid performance, which makes it a favorite of new users.
1- To set your strategy, you have to log in and enter the detailed view of the specific bot you want to configure.
If you have any problems finding it, remember just click on the bot icon (on the upper-right corner). Then, click on “Settings” on the left column. You´ll be redirected to the setting page.
2- Now, you only have to enter the parameters you prefer in each input. Let´s analyze them individually:
Enter the total amount you want to use for trading. The cryptocurrency you choose as the base currency will be the one used in the trade amount. We will discuss more about this in the next steps.
Remember, never invest more than you are willing to lose!
Enter the minimal percentage you want to profit per operation. This means that the bot will not make an operation unless will obtain that profit. Note that the number is in percentage; for example: 0.30 is the same as 0,3% (less than 1%).
There are some important thing to have in mind:
First, if you set a larger percentage, you are at risk of preventing your robot from doing operations, which is not optimal.
However, to ensure an actual profit, your target percentage needs to be higher than Binance trades fees require for each buy/sale cycle. At this moment, the average trading fee per operation is 0,1%, which means that you need to put a minimum of 0,3%. If you put 0,2% you can end without profit, because everything you earn is going to be spent on the fee payment. By entering 0,3%, you are guaranteeing a 0,1% profit per operation. You should check the updated Binance fees.
This is the percentage you are willing to lose. Like any investment, there are risks associated. If the value of a certain cryptocurrency drops, you can suffer a devaluation of your assets.
For example: if your safety threshold is 3, the bot will sell when the value of the cryptocurrency you´re holding at that moment drops by 3%, in order to avoid losses. However, there are some scenarios where even this technique cannot avoid losses.
“A stop-loss order protects profit or limits risk on an investor’s open position by exiting at a predetermined price.
…they will often add a add a follow-up stop-loss order to limit the amount of money they can lose if the investment moves against them. This order stays open until it reaches the stop price, and at that point, the order becomes a market order and executes.”
In this input, you can select the cryptocurrency pair you´re going to use, by simply selecting from the list. Brokerst uses the same currency pairs as Binance.
“A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency.
Currency pairs compare the value of one currency to another—the base currency (or the first one) versus the second, or the quote currency. It indicates how much of the quote currency is needed to purchase one unit of the base currency.”
You need to have in your Binance wallet enough funds to cover the selected trade amount of the base cryptocurrency.
This means that the trade amount entered in the first input refers to the Base cryptocurrency (the first currency of the pairs). In the next example, we set as trade amount 0,0045 BTC.
The quote currency (the second currency in the pair) is where our funds are going to be stored.
Last tip: we recommend you at the beginning to have some funds of both of the currency pairs selected, to cover the first trade fees.
Finally, you´ll choose the cryptocurrency that the bot is going to select from your wallet to start trading. This currency is one of the cryptocurrency pairs.
Summarizing, you need to have in your wallet this cryptocurrency. Actually, you need to have enough funds for this crypto to cover the trade amount selected.
In our example, our Coin position is "USDT" and or Base Currency is "BTC". This means that we have the equivalent in USDT of 0,0045 BTC. You can check out the market valuation of each currency selected if you have any doubts.
You can change the default name of your bot, for better identification.
3- When all the settings are complete, click “Save changes”.
Watch our video for more info. You´ll see the same steps we already explained, in an easy and dynamic way: